Ukraine’s government has raised almost $8 million in cryptocurrencies after posting appeals on social media for donations of bitcoin and other digital tokens, according to blockchain analysis company Elliptic.
Ukraine’s official Twitter account made the appeal for cryptocurrency donations on Saturday following the country’s invasion by Russia, posting digital wallets addresses for tokens including bitcoin and ether.
Ukraine’s Vice-Prime Minister Mykhailo Fedorov tweeted the wallet addresses. “Stand with the people of Ukraine. Now accepting cryptocurrency donations,” wrote Fedorov, who is also minister of digital transformation.
The donations came as Russian military vehicles pushed into Ukraine’s second-largest city Kharkiv on Sunday and explosions rocked oil and gas installations on the fourth day of fighting in the biggest assault on a European state since World War Two.
By 4 pm on Sunday, the wallet addresses had received crypto worth $7.9 million across almost 11,500 donations, London-based Elliptic said. The company tracks the movement of digital coins on the blockchain, a public ledger that records crypto transactions.
According to CNBC, the cryptocurrency wallets have attracted donations worth $10.2 million, which is in addition to the millions of dollars in digital currency that have been donated to non-government organizations that are helping the Ukrainian government.
About $1.86 million of the money donated to Ukraine’s government was generated through the sale of a non-fungible token, or NFT, originally intended to raise funds for WikiLeaks founder Julian Assange, the CNBC report said, quoting Elliptic.
On the communication site UkraineNOW, the ministry of defense calls for donations via bank transfers, but specifies that “national legislation does not allow the ministry of defense of Ukraine to use other payment systems (‘Webmoney’, ‘Bitcoin’, ‘PayPal’, etc.).”
And the same decentralized network that makes cryptocurrencies attractive to Ukrainian fundraisers could also benefit Russia.
Among the sanctions being considered against Moscow is exclusion from the Swift system, which allows interbank settlements between financial institutions around the world.
Some fear that cryptocurrencies could allow Russia to bypass such sanctions.
“North Korea has conducted robust hacking efforts with the intention of stealing cryptocurrency from exchanges and DeFi platforms,” explained Caroline Malcolm, from the analysis firm Chainalysis.
“They’ve been able to bring in billions of dollars worth of funds to the country, evading sanctions.”
Iran has also used cryptocurrency to bring money into the country, but mined it rather than hacking it, she added.
But as with the traditional financial system, “the cryptocurrency ecosystem can put measures in place to identify transactions from identified sanctioned entities,” she said.
This could mainly be achieved by analyzing data from blockchains – the registers where all cryptocurrency transactions are recorded.
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